Over the last four weeks, 22 million Americans have lost their jobs, and while the federal government has laid out a strategy for mortgage forbearance, the guidelines for landlords — and their renters — are much less clear.
According to the Department of Housing and Urban Development’s website, “Multifamily Housing encourages all owners to work with impacted residents and families to adjust rent payments, enter into forbearance agreements, and lessen the impact on affected residents. At this time, no additional subsidy funding has been made available.”
So far, the majority of renters are still paying full or partial rent. According to the National Multifamily Housing Council, 84% of apartment households made a full or partial rent payment by April 12 in its second survey of 11.5 million units of professionally managed apartment units across the country, up 15 percentage points from April 5.
But as stay-at-home orders get expanded, renters’ reserves will likely get depleted, and landlords are still trying to figure out how to navigate potential late payments or rent forbearance.
Real estate tech company Yardi released software this week that aims to streamline that process, allowing residential property management companies to manage and track rent deferral payment plans and recoveries.
Yardi Vice President of Residential Consulting Practices Tamara Berndt told HousingWire that any of Yardi’s client bases that are licensed for the Yardi Voyage platforms or RENTCafé platforms are able to use the product.
The product sets up a way for landlords to track the monthly payments they are receiving.
“This piece of the software gives our clients the ability to track how much they’re actually receiving in their monthly payments,” Berndt said. “And then, how much is being deferred for future collections, so that they can really hone in on and manage their cash flow, to be able to see what is going to happen with a mortgage payment and what should they do about their mortgage payments.”
After watching unemployment claims continuing to rise, Berndt said Yardi started working to find a solution to help its clients struggling to pay rent.
“Our clients were coming to us and saying we need something, so we hopped on that right away,” Berndt said. “We started developing a proof of concept, and then we brought together a steering committee of [about 15 to 20] clients.”
The deferral payment and recovery tool allows residents to set up payment plans for residents who ask for financial accommodations by creating a recovery schedule of deferred amounts.
Once the deferral agreement is signed, lease charges are automatically created each month with the deferred amounts and recovery charges as appropriate. Gross potential rent is not impacted, and all records are maintained in a clear and organized fashion, according to Yardi.
Berndt said this software took about two weeks total to create in response to the COVID-19 pandemic. But past the pandemic, Berndt said Yardi will continue to develop this software.
“I think that the impacts of the pandemic are going to be felt for a long time, as people are looking to recover and their rents that have been deferred, that’s going to last beyond the pandemic,” Berndt said. “While people are getting back to work, there’s still the recovery process.”
Renters upload proof of layoff or furlough documents, and sign deferral agreements in the RENTCafé resident portal or RENTCafé Resident app.
The new deferral and recovery payment plan technology is available to Yardi residential clients, including multifamily, single family, affordable and military properties.